Are you a lender with carried over instruments (COI)?
A COI is a contract that:
was made, and was in force immediately before 1 July 2010, and
is subject to the old Credit Code (the Uniform Consumer Credit Code).
Are you a COI lender?
You are a COI lender if you are a credit provider or lessor (lender) with COIs who will not offer credit contracts or consumer leases (contracts) on or after 1 July 2010.
Regulation of COI lenders
Under the credit regime, COI lenders were required to choose how they wished to be regulated under the National Consumer Credit Protection Act 2010 (National Credit Act) by 1 July 2010.
A COI lender can be regulated in one of the two ways described below:
Option 1 – Licensed with ASIC
COI lenders taking this option should have applied for an Australian credit licence before 31 December 2010.The provisions in the National Credit Act apply unmodified.
Option 2 – Become an unlicensed COI lender
COI lenders who have chosen not to apply for an Australian credit licence should have notified ASIC of their COI status before 1 July 2010. If you fall into this category you are an unlicensed COI lender and are subject to the COI statutory regime. An unlicensed COI lender is not able to enter into new contracts on, or after, 1 July 2010.
COI lenders are also subject to the statutory scheme if, for example, ASIC decides not to grant a licence or it is voluntarily surrendered or removed.
Further information for COI lenders
ASIC has issued Information Sheet 110 Lenders with carried over instruments to help COI lenders decide which option is most appropriate for their situation.
Further information about the new regime is available in the attachment to the media release issued by the Hon. Chris Bowen, Minister for Financial Services, Superannuation & Corporate Law on 30 March 2010.